NHL Agrees to Pricing Changes to Settle Antitrust Lawsuit Over TV Packages

Plaintiffs are challenging territorial restrictions on telecasts and the pricing of streams — and the results could impact cord-cutting.
 

Rather than go to trial in a closely followed antitrust lawsuit, the National Hockey League has cut a proposed deal that would allow its fans to spend 20 percent less on a digital package to watch their favorite team.

The proposed settlement comes about a month after a New York federal judge agreed to certify a class action that contends that consumers have been forced to pay too much for out-of-market NHL and Major League Baseball games — and that telecasts get blacked out for in-market games thanks to restrictive agreements with the leagues' broadcasting partners. The lawsuit also names Comcast and DirecTV as defendants, and since sports represent one of the major reasons why consumers don't cord-cut, the prospect of injunctive relief holds big ramifications to the television industry.

On Thursday, the plaintiffs submitted a motion for a preliminary settlement.

According to the memorandum, as part of the deal needing to be approved by the judge, the NHL will offer an unbundled package of games at discounted prices. That means fans will no longer have to pay full price to watch teams they might not care to see. As a result, "a fan of a particular team who presently pays $159 for a full season package (at the discounted 'early bird' price) will be able to obtain a single-team stream of his favorite team for approximately $105. In addition, Comcast and DirecTV will provide three weeks of free access to NHL Center Ice for their subscribers for the next two seasons, thereby reducing the package price by 12.5%."

Here are the full terms of the proposed settlement.

As stated, the judge will need to sign off on this, and there will be opportunity to object for those in the plaintiffs' class who believe this isn't sufficient. The debate could happen at a "Fairness Hearing." The settlement could also become the model for a settlement for MLB.

If there's a reason to be cynical about the terms of the deal, it's due to a largely overlooked portion of the judge's decision last month. She ruled out monetary damages for the plaintiffs. Instead, the plaintiffs only had the prospect of injunctive relief, which would still be a big victory if the plaintiffs overcame a defense that territorial restrictions on broadcasts had procompetitive effects. However, since class-action attorneys usually work on contingency, the foreclosing of monetary damages could have eliminated their economic incentive to go to trial. They are attempting to appeal the judge's decision in this regard.

In the proposed settlement, the attorneys would get their fees and costs from defendants.

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